Access to Tax Treaty Dispute Resolution Mechanisms in Cases of Abuse

Intertax, Volume 50, Issue 4, 341-355 (2022)

15 Pages Posted: 20 Jan 2023

See all articles by Aitor Navarro

Aitor Navarro

Max Planck Institute for Tax Law and Public Finance

Date Written: April 1, 2022


Reaching a common understanding of the interpretation and enforcement of tax treaties is a desirable policy goal. It results in higher certainty and helps to increase their effectiveness thus enhancing all the purported objectives of these international agreements. In this regard, dispute resolution mechanisms within international tax law fulfil a relevant coordinating function through the amicable assessment of frictions and mismatches in tax treaty provisions. Notwithstanding, access to these remedies is sometimes denied when the tax authorities consider that the case involves tax abuse even though anti-tax abuse measures usually pose some of the most complex interpretation challenges within tax treaties. Even after the post-BEPS wide implementation of broad-based treaty anti-abuse rules – such as the principal purpose test – countries are reluctant to grant unrestricted access to dispute resolution remedies. This contribution aims at depicting the rather asymmetrical state of affairs on the access to dispute resolution remedies in instances of tax abuse. Additionally, it purports to demonstrate that there are compelling policy reasons to support granting access to both mutual agreement and arbitration procedures in these cases and to criticize the incoherencies that originate from the existing restrictions.

Note: Reprinted from Intertax, Volume 50, Issue 4, 2022, 341-355, with permission of Kluwer Law International.

Keywords: Tax treaties, dispute resolution, mutual agreement procedure, arbitration, MLI, tax abuse, GAAR, PPT

JEL Classification: H20, H87, F23, F63, K33, K34

Suggested Citation

Navarro, Aitor, Access to Tax Treaty Dispute Resolution Mechanisms in Cases of Abuse (April 1, 2022). Intertax, Volume 50, Issue 4, 341-355 (2022), Available at SSRN:

Aitor Navarro (Contact Author)

Max Planck Institute for Tax Law and Public Finance ( email )

Marstallplatz, 1
Munich, Bayern 80539

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